There are many different strategies for setting the right marketing budget for your company. There is not one correct method for budget setting - your company may need to experiment with different strategies before finding the right fit. This presentation includes some of the best budgeting strategies our Michigan marketing company has used over the years as a leading healthcare and technology marketing agency. Options include setting budget as a percentage of revenue, as a percentage of net sales, based on competitors' marketing expenditures, and other strategies. For more information on marketing strategy and budgeting, visit our healthcare marketing firm at http://www.clarityqst.com/ or call (877) 887-7611 to request a quote.

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© Copyright 2010, Clarity Quest Corp. All rights reserved. Reproduction, adaptation, or translation
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The first option you have is to take a1. percentage of your
revenue and to use that on marketing for your company.
Most startups or small businesses usually allocate around
2-3 percent of their revenue. However, if you have a large
company or are in a very competitive industry, allocating
15-20% is not uncommon.
The second option is to use a2. percentage of your
net sales. This is similar to the first option, but you are
deducting returns, discounts, and allowances.
The third option is3. budgeting based on your
competitors’marketing expeditures. For this option
you would need to figure out how much your competitors
are spending for marketing. Once you have figured
this out, then you must expend slightly more on your
marketing budget. This will hopefully allow you to increase
your revenue accordingly.
The fourth method is using4. anything and everything
you can afford. This is a risky option, because you are
using the company savings and spending it on marketing.
This aggressive approach can either work to your
advantage or can fail miserably.
Setting your Marketing Budget
Determining the Right Amount
The fifth option is marketing based on your5. desired
customer growth. Your marketing budget will be
determined on customer number targets for the year.
Once you figure out how many customers you would like,
you have to multiply that by the amount it costs to bring
in new customers. After you have calculated this, then you
will know how much to allocate for marketing.
The sixth option is6. marketing for free. This is basically
doing everything you can without spending any money.
The most common guerilla marketing tactic is word-of-
mouth. However, it can get very time consuming doing
all your marketing this way, thus this might not be a wise
choice.
The seventh choice is getting7. professional advice from
an industry source. There are industry insiders who can
project the amount of money you will need to spend
for marketing to be successful. This number can be very
accurate, however is often unattainable for the small
business owner.
There are many ways to determine your marketing budget and it can be very
overwhelming to choose the right amount to spend for your company. Even
though most budget exercises require a bit of trial and error, this article should
help narrow down your options. There is no one “correct” option to consider when
setting your marketing budget, but here are a few methods that have worked for
many companies.

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© Copyright 2010, Clarity Quest Corp. All rights reserved. Reproduction, adaptation, or translation
without prior written permission is prohibited except as allowed under copyright laws.
The eighth option is marketing based on your8. corporate
objectives. This is a great way to market simply because
it is tailored to what you personally want to get out of
your marketing experience. You must create a marketing
plan, that will map out exactly how much you spend on
marketing, and where. One piece of advice when doing so
is contacting a professional that can help you tailor your
ideas.
The ninth option is budgeting based on your9. preferred
market share. This is when your projection is based
on the goal of attaining a specific percentage of your
particular market. You first must calculate every business’
total marketing expenditures in your market. After this
figure out where your business stands and then you can
decide how much to spend on marketing.
The tenth option is similar to the first option, except with a10.
little more help. It is a blank-page budgeting approach.
Our Excel Marketing Budget Spreadsheet is available
for download at www.clarityqst.com. Complete the
spreadsheet by marketing campaign and you will be able
to see the percentage of your total revenue to use.
After reading and further researching these ten options,
it should be clearer which option will work for you. We
recommend trying different options to ascertain which
method will work best for your business.